How UAE nationals get VAT refund on building new residences

FTA has issued specific guidelines to facilitate the UAE nationals to obtain refund of VAT incurred by them on building new residence. Such refunds are processed by the authority after a process of thorough verification of details submitted by the applicant. It is to be noted that the refund option is available only for VAT relating to expenses incurred on building residential buildings and not for any commercial properties.

Steps involved in a VAT refund claim by a UAE national on building new residence

The request for UAE VAT refund on building new residence is to be made through the e-services portal of FTA. The required documents including the details of the property and the applicant are to be attached along with the refund request which will be then reviewed by FTA. Detailed verification of the eligibility of the claim will be performed based on the details submitted. If found eligible, the authority can ask for additional documents which are to be submitted, then in the portal. FTA will send a notification to the applicant to inform them about the status of the refund request whether rejected, accepted, approved or amended.

Is there a time limit in claiming VAT refund on building new residence by a UAE national?

There is a timeline specified by the regulation to apply for VAT refund which is within six months from the date of the completion of construction of the new residence. The date of completion of construction is deemed to be either the date the residence is occupied or the completion date as per the completion certificate issued by competent authority in UAE, whichever is earlier. It is extremely important to adhere to the timelines for ensuring the successful processing and approval of the refund request.

Documents to be submitted for VAT refund claim by a UAE national on building new residence

Initially while applying for the refund, the applicant is expected to submit the below documents along with the refund request. 

• Copy of Emirates ID and family book
• Copy of declaration from the funding body or institution, if the construction was funded by any such body or institution
• Copy of the construction plan 
• Copy of the completion certificate and building permit of the property
• Proof to identify the applicant as the owner of the plot of land in which the building was constructed
• Document stamped by bank to identify the bank account details
• Document to evidence the date the building is occupied as applicable

It is to be noted that the authority may ask for additional documents or clarification on later stage during their verification of the refund application

Is VAT refund possible for retention payments made by a UAE national on building new residence?

As per the agreement with the builder, a portion of the amount due to the builder can be retained by the person building, and the retained amount can be paid after an agreed time period later than the immediate six months from the date of completion of the building. In such cases, the UAE national who has intention to apply for VAT refund request has to indicate the retention payments in the initial application for refund. Then another application for refund of VAT relating to retention payment can be made within six months from the date of such retention payment. The proof of such payment such as receipt shall be submitted along with such subsequent refund applications.

Choose CDA to get your VAT refund on building new residence

Individuals often find it as challenging to keep themselves updated about the developments in VAT rules. Proper VAT accounting is essential to ensure compliance with VAT laws and to timely claim eligible VAT recoveries. It is always suggested to consult with experienced tax professionals to manage the tax impacts on your transactions. 

Also read, VAT Refund Scheme for UAE Nationals

CDA Accounting and Bookkeeping Services LLC, are totally committed to sharing with you exceptional consulting services in the areas of tax and accounting with a view to positively contribute towards the fulfilment of your business goals. Also we have subject matter experts who can discuss with you further to clarify your concerns on finance-related areas.

Hope you got a clear idea of how UAE nationals get vat refund on building new residences. Still, have queries on VAT refund for your construction activities? CDA can clarify your queries.